It is one big question about using video SF/HW (amlogic) decoders of CE in retroarch. In context of issue MJPEG with HW accelaration would be better support only software decoding for all formats of videos in retroarch.
I saw errors in retroarch logs to AVC, but sample AVC in mp4 (close to PSP specification) was ok in kodi player with HW and also SW decoding without artefacts. Only mjpeg and avc are supported formats of video in PSP.